‘Formidable’ Amazon’s entry to Australia would improve etail across board say retailers
Welcome competition: eBay marketer Steve Brennen
The arrival of Amazon as a etail presence in Australia will push local retailers and marketers to improve the customer experience, according to some of Australia’s leading marketers.
Recent rumours have suggested global giant Amazon will come to the market one the government’s laws to hit goods coming in from overseas with GST.
eBay’s chief marketing officer Steve Brennen told the Retail Marketing Summit he welcomed the increased competition for the auction site, but was curious about what business model it may employ.
“I am fascinated about what model they will play,” he added. “Everywhere else it’s a logistics business, with things like next day delivery; it’s about efficiency. Here, there’s a huge distance between cities and logistics is a real challenge.
“Already 20% of online traffic from Australian shoppers goes to Amazon today – whether you go to a .com.au site or .com site, it doesn’t really matter, one in five shoppers buys from Amazon already, they’re here already.”
Asked about the potential impact Amazon might have on the market on a later panel Sandy Mellis, general manager of Reckitt Benckiser, said consumers were suffering at the moment with sub-par online retail because they were not yet being exposed to world’s best practice.
“The reason Australia is pretty ordinary is because no one has come in and said ‘it has to be better’,” said Mellis.
“Competition and someone setting the bar is what is going to change the game.”
‘Amazon is formidable’: John Batistich
John Batistich, director of marketing at Scentre Group, parent of Westfield Shopping Centres, said that Amazon was going to have an impact on the way local retailers operated.
“Amazon is formidable, it just registered $100b worth of sales, it has an incredible business of growth,” said Batistich.
“What it’s doing is they acquiring customers and there is a lot of conversation around its ability to sustain the high cost of delivery it’s generating.
“Amazon are advanced around data, it leads the market in that space, it will have an impact in this marketplace – the question is how sustainable that is.
“Amazon plays by different rules to many of the retailers in this region. It has wonderful capital reserves, massive technical investments – the question is: is that going to be sustainable?”
Tara Lordsmith, former general manager of marketing at Myer, said that online was mixed in terms of what it was actually delivering.
“It’s the omni-channel play, which is actually what works, and at Myer we were certainly looking at ways we could combine the two together.
“We had more visitors to our website than we actually do to our stores, but the conversion rate was absolutely ridiculously low, and it still is today for a whole heap of different reasons.”
However, Reckitt’s Mellis warned that traditional retailers and marketers taking on the etailers needed to make sure they had all their channels in place.
“I think it’s not either-or, it’s about balanced strategy. It’s about how are you managing your channel conflicts? People are going on Amazon to understand a product, but they are part of the channel strategy.”
Simon Canning
I’d be looking to improve NOW. Don’t wait till Amazon arrives.
That would be like hearing rumours for six months that Apple is going to release a gold iPhone, then releasing yours a week after theirs is announced.
Do better now.
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But Amazon has already been here for 20 years. Just one click of the mouse gets you anything you want…
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Australian retailers – Big on price, low on content….
Amazon – Low on price, big on content…..
I’d be looking to improve NOW aswell!!!
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It would be an exceptional channel to implement to already well established model’s. It’s a shame when “retailers” could actually be in the greater position compared to “etailers” currently operating in Australia.
What should be an advantage of multiple pickup locations and smoother logistic operations (assuming they have this) is let down by companies that are too slow to move in a digital presence trying to treat it like a website of a retailer.
There is plenty of space to move in treating the “etail” or online space as a proper channel.
Take Bunnings, in the last 2 years their online game whilst still substantial movement to make, has picked up considerably with their pricing becoming a lot sharper in comparison to what you would call the leading “etailers” in given verticals.
Not too mention the huge ace up their sleeve which you can count on….. that they have not started taking orders online…… yet.
When that arrives…. well you would want to be well established with a few of your own aces.
Milan Direct announcing also they are entering the furnishings model, to carve out their own piece of that sector.
Amazon…. will be another channel that can be optimized in a very large way, something that we’ve been able to leverage for US companies very effectively.
Most importantly will be in establishing a strategy to integrate the coming of Amazon into the process of your business and thus leverage the opportunity.
That being said…. many companies could do with just getting the basics right and see improvement.
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Amazon + Amazon Prime + Next Day / 2 Day Delivery in Australia will be a very different beast than the current Amazon + expensive delivery + 3-4 week wait for anything.
There is an opportunity for someone in Australia to do it now. Don’t wait or the moment is gone forever. I thought Big W had a chance but their limited stock online and pricey delivery made it pointless. Plus… Masters.
Target at the moment is doing pretty good. I have made a few purchases through them and it’s been great. One time I had a mistake and the local store fixed it without question.
Harvey Normans was hopeless. Took weeks, had to pay for delivery then had to go into store to pick it up anyway. just useless.
The local stores have improved – but I still feel Amazon is going to roll over the top of all of them by offering price, range and service that any of them could be doing now – but choose not to.
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